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Ray Dalio investment autopsy – The 200 words project

In 1975, at the age of 26, Ray Dalio founded Bridgewater Associates – a hedge fund.

6 years in, Dalio felt the debt levels in the government pointed to the fact that the US was on the brink of a recession. So, he began betting on it and publicizing it. But, to Dalio’s surprise, the stock market surged and it led to a tremendous embarrassment and loss of fortune.

To make sure that never happened again, he began keeping detailed records of every trade he made and began noting what happened with every investment – learning from both his success and painful losses. As Dalio puts it, pain + success = progress. As he reflected on these investments, he kept finding “rules” that governed how markets worked and kept refining it. At Bridgewater, he built a culture of “radical transparency” challenging his employees to question his decision making and assumptions.

As author Al Pitampalli observes in his book, Persuadable – “Does he have an ego? Absolutely. Many say his is over-sized. However, he realizes that having false self-confidence would cost a lot.”

In essence, Dalio built his success by being very persuadable to new assumptions and data with an inspiring process.